Allowed

Union Bank of India v. Nachiappan Senthil

DRT13 Aug 2026OA/1000/2025

Case brief

AI extract

What is this about?

The DRT ordered conditional attachment of respondent's immovable properties as a second charge to secure the applicant bank's claim of Rs. 18.04 crores arising from a guaranteed loan default, directing the respondent to show cause why security should not be furnished.

What did the court decide?

Respondent directed to show cause within 15 days why security of Rs.18.04 crores should not be furnished; failing which IA schedule properties to be attached as second charge.

Union Bank of India versus Nachiappan Senthil — Execution and Attachment | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 13^th day of August, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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I.A. No.1638 of 2026 in O.A. No.1000 of 2025

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Union Bank of India Hong Kong Branch 806-807, 9 Queen's Road Central, Hong Kong, Represented by Branch Manager of Union Bank of India, Chennai Main Branch, No-139, Broadway Chennai -108, now transferred to Assets Recovery Branch No. 168, Linghi Chetty Street, Chennai -600 001

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….Petitioner/Applicant

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-Vs-

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Mr. Nachiappan Senthil Son of N. Murugappa Chettiar residing at Prestige Bella Vista Poonamallee High Road Iyyappanthangal Chennai -600 056 …Respondent/ Defendant

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: - ORDER ON IA NO.1638 of 2026 - :

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The Original Application is filed by the Applicant Bank against the

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Defendants, seeking for recovery of money due from Defendant to pay a sum of Rs.18,04,53,499.58p (Rupees Eighteen Crores Four Lakhs

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Fifty Three Thousand Four Hundred and Ninety Nine and Fifty Eight

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Paise only) repayable together with further interest and costs.

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The Applicant Bank has filed the present petition i.e., I.A.No.1638/2026 with affidavit of the Chief Manager, Asset Recovery Branch, Chennai of the applicant bank, praying to pass an order of attachment before judgement in respect of IA schedule mentioned properties, pending disposal of the OA.

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In the affidavit filed along with IA, it is submitted by the applicant bank that the respondents have availed CCOD limit to the tune of Rs.7.50 lakhs, which was enhanced from time to time and the defendants have executed various documents and agreements in favour of the applicant for repayment of the said facility.

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It is submitted by the petitioner / applicant bank that the Respondent is one of the Director of The Millennium Silk International Ltd (Principal Borrower) and also the Personal Guarantor of the said company and hence he is liable to repay the outstanding dues payable to the Applicant Bank for the Credit facilities availed by the company ‘Millennium silk’. The Millennium silk’ and the respondent herein, had approached the Bank for sanctioning of working capital facility in order to do the business like trading of Silk, therefore, we have sanctioned the credit facilities of USD 2.00 (United States Dollars Two Million Only) and subsequently, the said facility renewed the working capital credit facilities for an aggregate amount of USD 2.75 Million (United States Dollars Two Million Seventy five dollars Only) and the same was duly accepted by all the concerned parties including the respondent . The necessary security documents like Trade

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Finance Agreement, Trust Receipt executed by the Millennium Silk, and the Respondent.

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It is submitted that the Respondent has executed the deed of continuing guarantee dated 28.01.2016 and 10.07.2018 as security in favour of the Bank to Guarantee all sums of money and liabilities which are due or owing or payable to the Applicant by M/s Millennium Silk International Ltd on any account together with all interest, fees, charges, commissions and other sums of money payable to the Applicant provided that the total amount recoverable shall not exceed USD 2,000,000.00 together with such charges, interest, costs, commissions, banking charges, legal and other costs charges and expenses as should accrue due. In view of the continuous breaches committed by the Defendant No. 1 to make the payments in accordance with the terms of the Facility letter, the Bank called for repayment of all credit facilities letter from Millennium Silk and inspite of repeated requests and reminders, there was no response from Millennium Silk. The Defendants have failed to repay the outstanding dues due to which the account of the Millennium Silk International Ltd was declared NPA on 30.09.2019, Even after Non Performing Assets, the Applicant issued a Recall notice on 02.10.2019, thereby calling upon the Defendant to pay an amount of USD 2,478,444.45 as on 30.09.2019 under the Guarantee, however the Defendant neglected to pay the amounts due under the guarantee or any part thereof.

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The petitioner submits that unfortunately despite the numerous

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requests and demands made by the Bank, the Respondent has failed to make payment in accordance with the terms of the Facility vide the letter dated 21.01.2016 and 26.06.2018. Meanwhile, a Petition was filed against Millennium Silk International Ltd. under Companies (Winding-up) Proceedings No. 139 of 2020 and a winding up order was passed against the borrower The Millennium Silk International Ltd. by the Hon’ble High Court of the Hong Kong Special Administrative Region, Court of First Instance on 07.09. 2020 and an official liquidator / provisional liquidator was appointed under Section 194(1) of the Companies (Winding up and Miscellaneous Provisions) Ordinance.

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The petitioner submits that the continuing guarantees was executed by the Defendant dated 28.01.2016, pursuant to which the Applicant herein has the right to invoke such guarantee in the event of default on the part of Millennium Silk to repay the outstanding amounts payable to the Applicant as envisaged under clause 9.1.6 of the deed of continuing guarantee executed by the Defendant, in view of default made by the Millennium Silk International Ltd to repay the outstanding balance and pursuant to the above mentioned, the Applicant initiated proceedings against the Defendants before the High Court of the Special Administrative Region Court of First Instance Miscellaneous Proceedings No.695 of 2020 for recovery of money of USD 2,478,444.45/- and interest in the amount of USD 136,163.38 (or its Hong Kong Dollar equivalent at the time of payment) from 21.06.2019 to 12.02.2020 the pending dues from the Defendant. Thereafter, the Originating summons dated 26.05.2020 was

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issued against the Respondent by the Bank in respect of the claim set out by the Bank in the statement of claim and the Defendant was required to either satisfy the claim or return to the Registry of the District Court, the acknowledgement of service duly stating the intention to contest the proceedings or to make an admission. However the Respondent failed to give any notice of intention to defend the matter or admit the amount of claim.

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It is further submitted that despite of the Originating of summons issued on 26.05.2020 by the applicant bank, no notice of intention to defend was given by the Respondent and therefore final judgment was passed against the Defendant by the High Court of the Hong Kong Special Administrative Region Court of First Instance in Miscellaneous Proceedings No. 695/2020 on 11.05.2022, wherein the Defendant was directed to pay to the Applicant US$ 1,420,856.04 (Or its Hong Kong dollars equivalent at the time payment), being the Principal sum owed to the Plaintiff under a facility letter dated 21.01.2016 and a Facility Letter dated 26.06.2018 executed by the Millennium Silk International Ltd. and together with interest thereon @ 6.5% P.A. from 01.08.2021 to the date hereof, and thereafter at judgment rate until payment and also order that the Defendants do pay the Plaintiff the sum of HK$68,148.80, being sums incurred in discharge of the rent and other outgoings affecting the Mortgage property, pursuant to Clauses 2.01 (j), 8.01(f), (h), (i) and 22.01 of the Mortgage and clause 1.4 of the Guarantee and the Defendant do pay the Plaintiff the sum of HK$125,107, being sums incurred in the HCCW

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139/2020 for recovering sums due from the Borrower, pursuant to clause

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2.01 (j) and 22.01 of the mortgage and clause 1.4 of the Guarantees.

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It is submitted that the Millennium Silk International Ltd. was wound up in pursuant of order passed by the Hon’ble High Court of the Hong Kong Special Administrative Region, Court of First Instance on 07.09.2020 in the Companies (Winding Up) Proceedings No.139 of 2020. T he O.A. is pending before this Tribunal. In meantime, the petitioner bank had verified the immovable properties of Respondent and found that he has purchased the properties morefuly detailed in the schedule to the IA and stands in his name. Encumbrance Certificate entries of properties reveals that the properties have been mortgaged by way of deposit of title deeds with Bank of India on various dates for availing loan and the Mortgages were registered in favour of Bank of India. The respective sale deed and Encumbrance Certificate are filed along with IA. It is therefore prayed for attaching the unsecured properties of Respondent to meet part of the liabilities of Bank. The O.A. claims already adjudicated and therefore, the Tribunal may be please to order the attachment of immovable properties as more particularly mentioned in the schedule as second charge over the same in order to secured the debts, as the Bank is constrained to recovery the huge amount as mentioned above payable by the Respondent as a Guarantor of claims. It seems that the Bank of India’s liabilities are lesser than the properties’ value and hence it is just and necessary by way of attachment of properties by creating second charge in favour of the Petitioner’s Bank to meet out part of O A claim. If the order of attachment

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is not ordered and second charges over the schedule mentioned properties has been created, the respondent may discharge the properties by way of discharge of mortgage from Bank of India and he may be fugitive from the liabilities of Applicant Bank.

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Heard and perused the records produced along with the IA.

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The Applicant Bank has filed the above I.A. on the premise that the respondent / defendant may alienate or dispose of or create third-party interest on the properties morefully described in the schedule to the IA.

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It is a matter of record that the OA was filed for recovery of sum of Rs.18,04,53,499.58p which is a colossal sum of money. The applicant bank submits that the respondent / defendant stood a guarantor for the credit facilities extended to M/s Millennium Silk International Limited and executed Continuing Guarantees dated 28.01.2016 and 10.07.2018. In view of default committed by the borrower, the loan account was classified as NPA on 30.09.2019 and default the applicant bank issued Recall Notice dated 02.10.2019, thereby calling upon the defendant to pay an amount of USD 2,478,444.45 as on 30.09.2019 under the Guarantee. However the defendant neglected to pay the amounts due.

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In the meanwhile, the applicant bank had filed a Petition against the borrower under Companies (Winding-up) Proceedings No.139 of 2020 and a winding up order was passed against the borrower by the Hon’ble High Court of Hong Kong Special Administrative Region, Court of First Instance on 07.09.2020 and an Official Liquidator was appointed under Section

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194(1) of the Companies (Winding up and Miscellaneous Provisions) Ordinance. Pursuant to the Continuing Guarantees executed by the respondent / defendant, the applicant bank initiated proceedings before the Hon’ble High Court of Hong Kong Special Administrative Region, Court of First Instance Miscellaneous Proceedings No.695 of 2020 for recovery of money of USD 2,478,444.45 together with interest. Since the respondent / defendant chose to remain ex-parte despite receipt of Summons, final judgment was passed on 11.05.2022.

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The applicant bank apprehends that the respondent may try and dispose of the said properties or create encumbrance on the same, in case the same is not attached. The records of the case reveals that the summons to sole defendant returned as ‘insufficient address’. The applicant bank had caused paper publication and filed proof thereof. When this IA was taken up for hearing on 07.08.2026, the counsel for the respondent / defendant appeared and undertook to file vakalath.

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As the outstanding amount is unsecured, considering the amount of claim involved in this case and the balance of convenience, the present IA is to be allowed by keeping open the merits of the case and without prejudice to the rights of both the parties. By doing so, no prejudice, no harm and loss will be caused to the Defendants.

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As per Section 19 (13)(A) of RDB Act,

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“ Where, at any stage of the proceedings, [the Tribunal on an application made by the applicant along with particulars of property

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to be attached and estimated value thereof, or otherwise] is satisfied that the defendant, with intent to obstruct or delay or frustrate the execution of any order for the recovery of debt that may be passed against him

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(i)is about to dispose of the whole or any part of his property;

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(ii)is about to remove the whole or any part of the property from the local limits of the jurisdiction of the Tribunal; or (iii)is likely to cause any damage or mischief to the property or affect its value by misuse or creating third party interest, the Tribunal may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Tribunal, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the certificate for the recovery of debt, or to appear and show cause why he should not furnish security.

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(B)Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Tribunal, the Tribunal may order the attachment of the whole or such portion of the properties claimed by the applicant as the properties secured in his favour or otherwise owned by the defendant as appears sufficient to satisfy any certificate for the recovery of debt.”

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As the Applicant Bank has prima facie established the essential ingredients for granting an order of temporary injunction restraining the defendant / respondent in respect of the property mentioned in the schedule to the petition, this Tribunal proceeds to pass the following order:

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ORDER:

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In the circumstances pleaded, respondent / defendant is hereby directed to show cause within 15 days from the date of receipt of this order, as to why he should not furnish security to the tune of Rs.18,04,53,499.58p claimed in the O.A., failing which the IA schedule mentioned properties shall be attached to answer the OA claim herein.

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Meanwhile, conditional attachment of the IA schedule mentioned properties to the extent of Rs.18,04,53,499.58p claimed in the O.A. together with further interest, is hereby ordered to secure the dues of the applicant bank, however subject to second charge of applicant bank as the Encumbrance Certificate produced by the applicant bank reflects the first charge of Bank of India vide

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(i) Mortgage Deed dated 20.11.2017 registered as Document No.3299/2017 before SRO, Sunguvarchatram in respect of Item No.1

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(ii) Mortgaged deed dated 20.11.2017 registered as Document No.3228/2017 before SRO, Sunguvarchatram in respect of Item No.2

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(iii) Mortgage Deed dated 17.11.2017 registered as Document No.12035/2017 before Registration District of South Chennai and Sub Registration District of Joint-1, Saidapet in respect of Item No.3

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(iv) Mortgage Deed dated 17.11.2017 registered as Document No.16188/2017 before SRO, Kundrathur and Registration District of Chennai South.

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(v) Mortgage Deed dated 20.11.2017 registered as Document No.5251/2017 before SRO, Sriperumbudur and Registration District of Chengalpattu.

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The Registry is directed to communicate this Order to the Concerned Sub Registrar Office/ Village Officer for necessary action and for records.

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IA Schedule properties shall form part of this order.

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 13^th day of August, 2026)

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SCHEDULE OF PROPERTIES

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Item No.1

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Apartment No. 407, in the 4^th floor, to an extent of 1235 sq.ft, in Block Alpha of project named Temple Green Phase-1, together with 962.5 sq. ft. undivided share and interest in the land comprised in S.Nos.162/1

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part. 162/2 part, 185/3 part, 162/3 part, 185/1B part and 185/2 part S.No.180, New No.135, Mathur Village. Sriperumbudur Taluk, Kancheepuram District, totally measuring an extent of 108.25 cents equivalent to 47154 sq.ft, or thereabouts bounded on the :

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North by : OSR area and road in S.Nos.186/2 part & 162/1 part South by : Land in S.Nos.162/3 part, 185/1B part & 185/3 part East by : Land in S.Nos.162/1 part, 162/2 part, 162/3 part, 162/4 part & 167/1

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West by : Land in S.Nos.186/2 part (road), 185/1A part & 185/1B part situated within the Registration District of Chenglepet and Sub-Registration District of Sub-Registrar, Sunguvarchathiram situated within the Registration District of Chenglepet and Sub-Registration District of SubRegistrar, Sunguvarchathiram

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Item No.2

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Flat bearing No.TH No.82, in Temple Green Town House, constructed in the land of 1005 sq.ft, comprised in Survey No.97/4 and bearing TH No.082 situated at No.180, New No.135, Mathur Village, Sriperumpudur Taluk, Kancheepuram District and bounded on the

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North by : TH No.83 in Survey No.97/4 part South by : TH No.81 in Survey No.97/4 part

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East by : 24' wide road in Survey No.97/4 part West by : TH No.79 in Survey No.97/4 Part & 97/5 part

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situated within the Registration District of Chenglepet and SubRegistration District of Sub-Registrar, Sunguvarchathiram

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Item No. 3

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Apartment No. 9063 in the floor to an extent of 2256 sq.ft, together with 584.61 sq.ft, undivided share of land, right and interest in the of 25.18 acres comprised in Survey Nos. 1/1, >2 2, 3/1, 3/2, 3/3, 5/1, 8/2A, 50/1A, 50/2, 50/3, 50/4, 51/1A(part), 51/1 Bl, 51/1B3, 51/ICI, 51/1C3, 51/ID,

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51/1E, 52/1, 52/2, 53, 54/1 (part), 35, 42/1, 42/2, 42/3A, 42/3B, 42/4, 42/5, 43/1, 43/2, 44/1A, 44/1B, 44/2, 44/3, 45/1A, 45/1B, 45/2, 45/3, 45/4A, 45/4B, 46/1, 46/2, 46/3, 47/1E, 48/1A, 48/1B, 48/2, 48/3, 48/4, 49/1, 49/2, 49/3 and 50/1B on Mount Poonamallee Road, Ayyappanthangal village, Sriperumbudur Taluk, Kancheepuram District within the Registration of District of South Chennai and Sub Registration District of Joint-1, Saidapet and land bounded on the :

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East by :Road and Private Properties;

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West by : Private Properties;

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North by : Road and Private Properties; South by : Road and private properties.

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Item No.4

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Villa No.AI, Ground floor, to an extent of 1636 sq. ft. and carparking name villa Bali together with 619.30/10511 sq. ft. undivided share of land in 10511 sq.ft, comprised in S.No.35/3, in the layout approved vide Layout Approval PPD/LO No.100 of 2006 vide Letter No. LI/14392/2005 dated 3.10.2006 in Porur village, Sriperumbudur Taluk, Kancheepuram District and land being bounded on the :

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East by : 24 feet wide public road; West by : Plot No. 2 & 3 and land in Survey No. 29; North by : Plot No. 6 & 7,8 & 9,10 South by : Land in Survey No. 35/4A

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Situated within the Sub Registration District of Kundrathur and Registration District of Chennai South.

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Item No.5

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Apartment bearing No. II D , in block No. 2^nd floor, super built up area of 1082 sq.ft, together with 616 sq.ft, undivided share of land in land to an extent of 20 Acres 97 cents, comprised in Survey Nos. 6/1, 6/6, 6/9, 7/5, 6/2, 6/12, 6/13, 6/4, 6/5, 6/10, 7/2, 6/15, 7/14, 6/8, 7/1B, 6/11, 6/14,

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7/4, 6/17, 7/3, 7/6, 7/1A, 7/12, 7/7, 7/10, 7/8, 7/9, 8/14, 8/16, 8/4A, 8/12, 8/18, 8/4B, 8/15, 8/5, 8/7, 8/9, 8/3, 7/15A, 7/15B, 7/17, 8/1, 8/2, 8/6, 8/10, 8/13, 8/17, 9/1, 9/3, 9/4, 9/5, 9/6, 9/7, 9/2B, 7/13, and 7/11, situated at VGN BRIXTON, Vellanthangal village (Tambaram Group), Sriperumbudur Taluk, Kancheepuram District and situated within the Sub Registration District of Sriperumbudur and Registration of District of Chengalpattu.

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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Uploaded on 13.08.2026 at 13:00 hours

Union Bank of India v. Nachiappan Senthil

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Nachiappan Senthil

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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